The Lowest Interest Rate on Federal Loans Created a Record Property Rush in Turkey!
The mortgage loan packages introduced by the federal banks in Turkey at historically low-interest rates have brought along a record surge in housing loans, which saw an increase of around nearly $613 million. Brand-new homes will have up to 15 years of payment on mortgages, with interest rates as low as 0.64% and can have a no-payment period of 1 year. Meanwhile, the low equity-down payment rate starting at 10% will be applied for the use of financing. Turkey’s three largest federal lenders revealed four new credit packages in June to energize the transition to post-coronavirus normality and revive the economy.
According to the Banking Regulation and Supervision Agency (BDDK) data, the banks' loan amount extended by 4 billion USD between May 29 and June 12, reaching over 291 Billion USD. To ensure that a large number of buyers can benefit from this opportunity, the amount of financing that can be provided per customer will be limited, and financing up to approximately $110,000 USD will be available for residences in three largest cities, Istanbul, Ankara and Izmir, while a maximum of 80 thousand USD will be put in place for other cities.
The government supported Turkish banks, Ziraat Bank, Halkbank, and Vakif Bank's investments include mortgages for brand-new properties, loans for vehicle purchases, locally manufactured goods, and holiday expenses at annual interest rates running below inflation. An average increase of 125 million USD in housing loans was recorded in the week between June 5-12.
During this 2 week, loans from public banks soared 2.47 billion USD to 145.7 Billion USD. Between May 29 and June 12th, buyer loans grown by 2.04 billion USD, with public banks providing 1.31 billion USD of this payment. Consumer loans rose from TL 37.89 billion USD to 39.20 billion USD.
While housing loans increased by a record amount of 612.15 million USD in the first week of June, federal banks provided 539.27 million USD of this growth. In just the first two weeks of June, there was an increase of 714.23 million USD in housing loans. Public banks lead the payment with 597.62 million USD.
Mortgaged house sales recorded a 23.9% increase at 18,483 – a 36.3% share of all sales over the same period. By the end of the month, Home sales were covering 50% in Turkey after the new mortgage loan packages were introduced. The sales are expected to rise significantly beyond the month, thanks to these federal mortgage loan packages. In fact, the real estate sector will likely make as many sales by the next season as in a year if banks continue to offer low-interest mortgage loans.